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Condo | HOA Lawyers

Association Can Assign Enforcement Authority to a Manager

Facts

Seaside is an 80-acre development in Florida.  In the 1980’s the developer recorded declarations for nine separate neighborhood associations.  The language in each of the declarations are identical, providing the association with “the right to enforce, by any proceedings at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration.”  In 1991 the nine neighborhood associations amended their declarations and formed the Seaside Town Council (“Manager”) to “[a]ssume management of the administration and operations of the Association.”  Sometime thereafter the developer amended the Manager’s code and acted unilaterally to operate the architectural review committee of the associations in violation of the Manager’s code.  In 2011 the nine associations then voted to have the Manager file a lawsuit against the developer to protect their rights and to “assign “to Manager” the right to otherwise prosecute this lawsuit on their behalf.”  The Manager then sued the developer for various alleged violations of the declarations.  The developer answered the complaint.

Trial Court

The developer moved for summary judgment arguing that the Manager lacked standing to sue on behalf of the nine associations.  The trial court agreed, holding that that the Manager only had “standing to sue for collection of assessments” under the amended declaration, not other violations.

Appellate Court Decision

The appeals court disagreed, reversing the trial court and finding that standing existed both under the amended declaration and the assignment that was voted on by the nine associations.  The appeals court found that the amended declarations were not ambiguous and therefore no interpretation of them was required (which the trial court had engaged in), since the document clearly provided the Manager with the right and obligation to “manage and operate the neighborhood associations, including the right to sue on their behalf.”  As to the assignment, the appeals court held that “[a]ll contractual rights are assignable unless the contract prohibits assignment, the contract involves obligations of a personal nature, or public policy dictates against assignment.”  Here the assignment vested the assignee, the Manager, with the rights of the assignor associations, and therefore, the Manager could bring the action.  The case was then remanded to the trial court for further proceedings.

LESSONS LEARNED:
  1. The rights and obligations of an association can be assigned to its manager; and
  2. If you are not sure that your association documents provide your manager with the rights and duties you want the manager to have, amend your contract to clearly provide, or, as was the case here, consider assigning to the property manager the right for so long as she or he remains the property manager or until the assignment is revoked.

Seaside Town Council, Inc. v. Seaside Community Development, ___ So.3d ___ (2021)

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